Piercing Line
Bullish reversal2 sessions
A gap lower that gets bought back through the middle of the prior session. An engulfing that ran out of room.
The shape: A down session, then an open below its close and a close back above its midpoint
What it is
The second session opens below the first session's close — a gap against the buyers — and then spends the day recovering, closing above the midpoint of the first body but still short of its open.
It is the weaker sibling of the bullish engulfing, and the difference is measurable: an engulfing takes back the whole prior body, a piercing line takes back more than half.
The gap is what makes it worth naming. Price opened where sellers wanted it and finished where buyers did.
How to read it
How far it pierced is the reading. Just past the midpoint is a marginal version; close to the prior open is nearly an engulfing.
The opening gap's low is the level to watch afterwards. Trading back down through it says the recovery was a one-session affair.
On the chart: a triangle below the bar for a bullish reading, above it for a bearish one, a diamond for indecision. Hover any mark to see the pattern and what qualified it — the level it formed at and the move it followed.
Using it on the wheel
Piercing lines cluster where overnight gaps happen — after news, after a sector move, at the open following a weekend. Those are also the sessions where option premium is richest, which is why the pattern shows up in put-selling conversations at all.
The prior session's low is the reference level here, not the piercing bar's close: it is the price the market gapped below and then declined to stay under.
Like everything in this guide, these are descriptions of conditions and reference levels — context for your own decisions, not instructions to trade.